Porsche now makes $17,250 per car, report says

With just under a quarter of a million cars sold in 2016, Porsche isn't small anymore

March 20, 2017

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It's no secret that manufacturers make bigger profits on bigger vehicles -- it's not just the consumers who want large SUVs -- but sports-car companies make an impressive amount of money per car, too. Bloomberg reports that Porsche netted approximately $17,250 per car in 2016 (depending on exchange rates), which represents a 9 percent improvement over 2015 for the once-small German automaker.

That once-small German automaker delivered 238,000 cars in 2016. That's still a small drop in the bucket for parent company Volkswagen Automotive Group overall, which delivered 10.3 million cars last year -- a record despite the woes of the diesel crisis. And Porsche's operating profit in 2016 amounted to 3.9 billion euros ($4.1 billion), which itself represents a 14 percent improvement over the preceding year.

By comparison, Bloomberg notes, Mercedes-Benz parent company Daimler AG and BMW both made around $5,000 per vehicle. But those automakers are very different from Porsche: Mercedes-Benz sells a tremendous number of commercial vehicles and other moderately priced passenger cars that we don't see in North America; BMW has to compete pricewise with the likes of Audi and Mercedes-Benz while trying to woo non-luxury car buyers with smaller and more affordable entry-level vehicles.

How does Porsche manage to make more than triple than its German rivals per car? A lot of it comes down to price, Bloomberg says, but options also help. Porsche models -- even the base Macan which now makes up 40 percent of all Porsche sales -- do not represent casual, point-A-to-point-B vehicles. Customers pay a premium for the brand's reputation and do not skimp on options, which German automakers tend to price aggressively (is how we'll put it).

The Macan is one of just a couple models in the lineup that has to stay grounded; the midsize crossover starts at $48,550 in the U.S. But even for this model options can pile on quickly. Models like the recently renamed 718 Boxster start at $57,050 and also serve as the entry point for the brand (provided one does not get into Porsche ownership with a used Boxster from 15 years ago), but the pricier models like the new 911 GT3 will ultimately make money for the automaker per car.

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The days of Porsche being a maker of artisanal, small-batch sports cars are starting to fade from memory -- it's difficult to claim that status when delivering just under a quarter of a million cars per year -- and the automaker believes that more is better to a certain degree, having kicked up production by 47 percent in the last three years. Porsche can still rely on the exclusivity and mystique of its brand as models like the Cayenne and the Panamera haven't dented the automaker's image, while still relying on the Macan to drive customers who aren't looking for GT3-level performance on their commute to the brand.